I have a 1967 Mustang with a 289, manual transmission.

Does the starter normally smoke when it is bad or just make noise?

 

Smoking? Is yours smoking? Usually when the bendix spring goes out it just hums when you hit the starter. At any rate, whether it is smoking or humming and not working to start the car, it needs to be replaced.

 

I would say a good rule of thumb is regardless whether your starter is brand new or on its last leg, if it's smoking you may have a problem on your hands! lol

The only reason I would think smoke would be coming from the starter is maybe somewhere along the block you are leaking oil and when the engine heats up it could be burning the oil off (which may look like the starter is smoking). Are you getting smoke as soon as you start the car or did you notice it after you've been running the car for a while?